6 oct 2016 - pacific basin shipping limited...3q16 trading update 4 third quarter 2016 pb update ......
Post on 31-May-2020
0 Views
Preview:
TRANSCRIPT
6 Oct 2016
3Q16 Trading Update 2
Freight Market Improves From Very Low Base
* net of 5% commission
Source: Baltic Exchange, data as at 30 Sep 2016
Increased cargo volumes and improvement in market conditions since historic lows in Feb
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16
Baltic Handysize Index (BHSI) & Baltic Supramax Index (BSI)
US$/day net*
30 Sep 2016:
BSI: $6,750
BHSI: $5,790
BSI: $2,417
BHSI:
$2,563
3Q16 Trading Update 3
Our Performance in 3Q16 and cover in 2017
US$/day Handysize Supramax
PB TCE per day 3Q16 $7,040 $7,360
PB TCE per day YTD $6,400 $6,430
Market Index Rate YTD $4,450 $5,300
PB Outperformance YTD 44% 21%
PB TCE Cover Rate for 4Q16 $7,960 $7,460
% of Contracted Days Covered 74% 75%
PB TCE Cover Rate for 2017 $9,480 $11,410
% of Contracted Days Covered 18% 27%
201
6 Y
TD
2017
3Q
4
Q
3Q16 Trading Update 4
Third Quarter 2016 PB Update
Put options on 2018 convertible bonds were exercised in Sep, to be repaid in Oct 2016
Reduced oil & gas, mining & construction leading to deterioration in tug & barge values:
Recent towage disposals expected to generate US$3m cash, but US$2m book loss
Additional disposal losses or impairments possible on our remaining towage assets at the year end
Continuing efforts to reduce our costs (e.g. scale benefits) without compromising safety & maintenance
Establishing new commercial office in Rio to grow our cargo volumes in east coast South America
3Q16 Trading Update 5
Global Dry Bulk Demand
Source: Clarksons Platou, as at 29 Sep 2016 * Minor bulk trade: 1,870 mil tonnes
Iron Ore
Coal
Sub major bulk total
Copper Concentrates
Sugar
Cement
Soybean
Wheat / Grains
Manganese Ore
Forest Products
Others
Agribulks
Fertiliser
Steel Products
Scrap Steel
Bauxite / Alumina
Nickel Ore
PB focus cargoes total*
2016 Est. Total Dry Bulk
1,411
1,108
2,519
29
60
109
135
337
27
349
315
164
158
404
99
122
34
2,342
4,861
(Volume)
Million Tonnes YOY Change
PB
Fo
cus
Expected Global Dry Bulk Seaborne Trade Growth in FY 2016
4%
-2%
1%
10%
7%
6%
5%
2%
4%
2%
1%
1%
1%
-1%
-2%
-3%
1%
1%
-25% -20% -15% -10% -5% 0% 5% 10%
-23%
2016 dry bulk volume expected to
grow 1% YOY
2016 dry bulk effective demand
expected to grow 1.8% (YTD: 1.5%)
YTD Chinese dry bulk imports
increased 6.5% YOY due to
Chinese iron ore & coal imports
Seasonally strong US grains export
volumes in 3Q
Minor bulk is not minor –
minor bulks & grain is 48% of total
dry bulk demand
3Q16 Trading Update 6
Self Correcting Supply Factors
Source: Clarksons Platou, data as at 1 Oct 2016
New Vessel Ordering is Down
Scrapping Continues
Handysize scrapping (25,000-39,000 dwt)
Other dry bulk scrapping
In Jan-Sep:
Net fleet growth: 2% (Handysize: 2%)
51% shortfall in deliveries
25mil dwt scrapped (annualised 4% of fleet)
Orderbook:
Overall: 13% (Handysize: 14%)
Negligible new ship ordering
2016 2012 2013 2014 2015
4.3%
2.1%
0% 0%
5%
10%
15%
20%
25%
Per quarter annualised
in % of fleet (dwt)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2014 2015 2016
FY14: 16 mil dwt FY15: 30 mil dwt
Mil dwt
9M16: 25 mil dwt
Fleet Growth is Reducing
Total Dry Bulk
YOY Net Fleet
Growth (%)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
03 04 05 06 07 08 09 10 11 12 13 14 15 16
Lowest fleet growth since Aug 2003 2%
3Q16 Trading Update 7
Dry Bulk Supply & Demand
Source: Clarksons Platou, Pacific Basin
Supply:
Estimate FY2016 net fleet growth about 2%
New deliveries partly offset by scrapping
(Annualised 6% new deliveries vs 4% scrapping)
Positive factors:
Fewer & fewer ships delivering in 2017-18
Higher oil prices reduces sensitivity of ship operating
speeds to increasing freight rates
Ballast water management convention in Sep17
encourages scrapping older ships & poor performers
Demand:
YTD overall demand growth: 1.5%, FY forecast: 1.8%
Chinese steel exports remained at high levels
Chinese imports of major bulk & 7 important minor bulks
increased YOY, especially iron ore and coal
Seasonally strong US grain exports
Scrapping (dwt)
New deliveries (dwt)
Demand Growth (%)
Net Fleet Growth (%)
Demand / Supply
YOY % Change
New Deliveries / Scrapping
Mil Dwt
49
-30
1.8%
2.0%
-4
-2
0
2
4
6
8
-40
-20
0
20
40
60
80
2014 2015 2016E
3Q16 Trading Update 8
Handysize Vessel Values
Source: Clarksons Platou
30 Sep 2016
Newbuilding (35,000 dwt):
US$19.5m
Significant gap between newbuilding and secondhand values
discourages new ship ordering which was negligible in 3Q
Current value of secondhand Handysize ship: US$10.5m
(13% up from 2Q market low values)
5 years (32,000 dwt): US$10.5m 5
10
15
20
25
30
35
40
45
50
55
04 05 06 07 08 09 10 11 12 13 14 15 16
US$ Million
3Q16 Trading Update
Borrowings and Capex
9
Bank borrowings: US$642m , undrawn committed bank facilities US$272m
Convertible bonds, face value US$249m, book value US$230m
Vessel capital commitments: US$237m
Cash Position as at 30Jun: US$406m
2018CB repayment on 24Oct: US$124m
As in 2016 Interim Report
Update after the exercise of put options of 2018 CB
2018 CB
repay in Oct16
3Q16 Trading Update
Our Outlook and Strategy
Dry Bulk Outlook
Increased cargo volumes have supported stronger rates since Feb lows
Minor bulk demand is not so minor – growing & less dependent on China
Stronger than usual South American agricultural exports season in 1H,
followed by seasonally strong US export volumes, esp. soybeans & corn in 3Q
– but expect a continued weak market in the medium term
Scrapping, negligible new ship ordering & shrinking orderbook to lead to
healthier supply/demand balance in time
Strategy
We continue to manage for a weak market in the medium term
Fully focused on our world-leading Handy/Supra dry bulk business
Driving further costs savings, conducting our business efficiently & safely
Continue to generate cash from disposal of non-core assets
Astutely combining ships & cargoes to maximise our utilisation & margins
10
Business Model Premium
High-quality predominately
Japanese-built fleet
Experienced staff, globally
Strong counterparty
Pacific Basin Benefits:
Now fully Handy focused
Well positioned
www.pacificbasin.com
More on financial details: 1H16 Interim Report
3Q16 Trading Update
Disclaimer
This presentation contains certain forward looking statements with respect to the financial condition,
results of operations and business of Pacific Basin and certain plans and objectives of the management of
Pacific Basin.
Such forward looking statements involve known and unknown risks, uncertainties and other factors which
may cause the actual results or performance of Pacific Basin to be materially different from any future
results or performance expressed or implied by such forward looking statements. Such forward looking
statements are based on numerous assumptions regarding Pacific Basin's present and future business
strategies and the political and economic environment in which Pacific Basin will operate in the future.
Our Communication Channels:
Financial Reporting Annual (PDF & Online) & Interim Reports
Voluntary quarterly trading updates
Press releases on business activities
Shareholder Meetings and Hotlines Analysts Day & IR Perception Study
Sell-side conferences
Investor/analyst calls and enquiries
Contact IR – Emily Lau
E-mail: elau@pacificbasin.com
ir@pacificbasin.com
Tel : +852 2233 7000
Company Website - www.pacificbasin.com Corporate Information
CG, Risk Management and CSR
Fleet Profile and Download
Investor Relations:
financial reports, news & announcements, excel
download, awards, media interviews, stock quotes,
dividend history, corporate calendar and glossary
Social Media Communications Follow us on Facebook, Twitter, Linkedin,
Youtube and WeChat!
11
3Q16 Trading Update 12
Appendix:
Pacific Basin Dry Bulk – Earnings Cover
Our cover provides a degree of earnings visibility - ship operators typically face significant
exposure to spot market
2016 uncovered days excludes revenue days related to inward chartered vessels on index-
linked rates
Revenue Days
2015 data as announced at Sep 2015
As at 30 Sep 2016
Currency: US$
Handysize Supramax
1Q-3Q Completed Covered Uncovered
Contracted
FY16 95%
$6,580 FY16 94%
$6,690
39,290
days
34,720
days
59%
$8,820 74% $7,960
18% $9,480
48,860 Days 45,630 Days
36,900 Days
2015 2016 2017
100%
$8,070
100%
$6,400
4Q
9,570
days
4Q
10,910
Days
16,590
days
22,030
days
79% $8,400
75% $7,460
27% $11,410
20,450 days
26,980 days
11,390 days
2015 2016 2017
100%
$9,460
100%
$6,430
4Q
3,860
days
4Q
4,950
Days
3Q16 Trading Update
Appendix:
Pacific Basin Dry Bulk – Diversified Cargo
Diverse range of commodities reduces product risk
China and North America were our largest market
60% of business in Pacific and 40% in Atlantic
13
Our dry bulk cargo volume (1 Jan 2016 – 26 Sep 2016)
3Q16 Trading Update 14
Appendix:
Fleet List – 1 October 2016*
Owned Chartered Total
Delivered Newbuilding Delivered* Newbuilding
Handysize 70 7 65 5 147
Supramax 17 4 72 0 93
Post-Panamax 1 0 1 0 2
Total 88 11 138 5 242
Pacific Basin Dry Bulk Fleet: 242
Average age of core fleet: 7.1 years old
* Average number of vessels operated in September 2016
www.pacificbasin.com
Fleet Details
top related